PINS A3.2.2 Effect of guarantee or collateral

(1) Assets that have been explicitly, unconditionally and irrevocably guaranteed for their remaining term to maturity by a guarantor with a counterparty rating in Grades 1, 2 or 3 who is not a related party to the insurer may be assigned the asset risk charge that would apply to a debt instrument issued from the guarantor.
(2) Where an insurer holds collateral against an asset, and this collateral takes the form of a charge, mortgage or other security interest in, or over, cash, or any debt security whose issuer has a counterparty rating of Grades 1, 2 or 3, the insurer may apply the asset risk charge relevant to the collateral (instead of applying the asset risk charge that would otherwise apply to the asset).
(3) The provisions in subrules (1) and (2) above apply only to so much of the asset that is covered by the guarantee or the collateral.
Amended by QFCRA RM/2015-3 (as from 1st January 2016).